Saturday, November 22, 2008

The Deficit vs. The Wealthy

After reading a few recent "news" articles, I began thinking about our deficit. It's pretty bad, you know. Up to $455 billion right now (now = November 2008). Lots of people have lots of different ways they'd like to deal with it. You know what they say about opinions...

Some folks - including the recent President-Elect, Barack Obama - believe the answer (or at least most of the answer) lies in increasing taxes on the "wealthy." That's certainly one option. One I gave some thought to this morning.

I'm confident that debates on taxes in this country will continue as long as the country itself does. Nevertheless, I decided to crunch some numbers I hadn't seen crunched in any major news outlets (CNN, FOX, MSNBC, USAToday, etc.).

How much money was collected by the government in federal taxes just last year (2007)? Lots. Well over 2-and-a-half $trillion$, in fact. So, I guess the idea (held by some) is to increase taxes on the 'wealthy' to up that gigantic number a bit, so we can start making a dent in our budget deficit.

As anyone with a 3rd grade education could see, the "wealthiest 1%" of taxpayers actually gave this country more than double what our current budget deficit is. The solution then - as suggested by some - is to increase taxes on this tiny minority of taxpayers who already pay nearly two-fifths of what the government receives, per annum. That's 1% of taxpayers (not 'all citizens,' taxpayers) paying 36.9% of all taxes received by the federal government.

After seeing this, I have to sort of wonder aloud: is the problem really that the wealthy aren't "paying their share," or is it that the federal government couldn't successfully manage a lemonade stand? When 46% of the taxes collected from just 1% of all taxpayers could completely eliminate the budget deficit - why are we even talking about raising taxes??

Why not have the (super bloated) government tighten its belt just a bit, and learn to effectively manage the trillions of dollars it already receives from us? (Before okaying a tax increase on those who shoulder the majority of the burden.)